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August 30, 2018

Tribal areas’ merger with KP: Caretaker cabinet overruled last govt’s tax incentives

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August 30, 2018

ISLAMABAD: The Senate Standing Committee on Finance and Revenue on Wednesday ordered the Federal Board of Revenue (FBR) to complete an outstanding inquiry against officials suspected of involvement in corruption and submit its report within three months.

The committee, chaired by Senator Farooq Naek, met to examine a progress report on action taken by the FBR against corrupt members of staff.

The committee had in February ordered the FBR to finalise its findings within three months. However, the deadline was not met, much to the chagrin of the committee's members. They scolded the FBR chairman, but gave him a further three months to complete the inquiry and submit the findings in person to the Senate committee.

The committee was informed that more than 180 cases of corruption were under investigation. Senator Mohsin Aziz pointed out that action in these cases has been pending since 2014, despite the orders issued by a Senate sub-committee that he chairs. Explaining the delays, the Member Administration of the FBR told the committee that several cases were sub judice. Senator Naek told the FBR to provide details of the cases under litigation.

The committee was informed that a case pertaining to tax exemptions granted to the Sino-Hydro Corporation, a major power project construction company, had been submitted to the Supreme Court. If approved by the bench hearing the case, an exemption certificate would be issued within a week.

The Senate committee was briefed by the FBR about the implementation of tax relief regimes announced by the government to expedite the merger of the federal and provincially administered tribal areas, including Malakand Division, with Khyber Pakhtunkhwa under the 25th amendment to the Constitution. The committee asked the FBR to submit a comparative study of the tax incentives.

The FBR officials told the committee that the matter had been complicated by the caretaker government, which had amended the decisions of the previous Pakistan Muslim League-Nawaz administration and issued contradictory statutory regulatory orders. The committee members questioned the authority of the caretaker government to take tax-related decisions. However, a law division official pointed out that government affairs could not be put on hold during the tenure of a caretaker administration.

Naek said that the caretaker government's decisions would be reviewed to ascertain whether it had benefited the affected population.

The committee had been scheduled to consider the recent substantial depreciation of the rupee against the dollar, a point raised by Senator Talha Mahmood. However, the matter had to be deferred due to the absence of the Minister of Finance - who was chairing a meeting of the Economic Coordination Committee of the federal cabinet - and the Governor of the State Bank of Pakistan. Naek directed the finance minister to attend the next meeting of the committee.

The Senate committee meeting was attended by Senator Mian Muhammad Ateeq Sheikh, Senator Mohsin Aziz, Senator Dilawar Khan, Senator Khanzada Khan, Senator Muhammad Akram, Senator Musadik Masood Malik, and senior officers from the Federal Board of Revenue (FBR), Ministry of Finance and Ministry of Law and Justice.

Senator Fida Muhammad, Senator Mirza Muhammad Afridi and Senator Shammim Afridi were invited to provide their input on the 25th amendment.

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